Goldman Client Pans Slowness to Reassure Customers

APG, one of Europe's largest asset managers, has criticized Goldman Sachs Group Inc for not communicating quickly enough with clients after ex-banker Greg Smith's public condemnation of the way the bank treats its clients.

The Dutch investment advisor, which runs around 300 billion euros of assets for more than 4.5 million people in the Netherlands, said it was surprised it took the Wall Street company more than a day to offer APG any reassurance on points raised in Greg Smith's resignation letter.

"We would have expected that a company that faces such a big media backlash over something so core to their business such as client trust would have instantly reached out to those clients to say something," APG spokesman Harmen Geers told Reuters.

After Smith's scathing remarks were published in the New York Times on Wednesday, Goldman Chief Executive Lloyd Blankfein and Chief Operating Officer Gary Cohn issued a memo to staff describing the views and observations of the former vice president as "foreign" to most of his 12,000 peers.

Geers said the bank contacted APG late on Thursday offering a copy of the staff memo and telephone explanation of its message, a gesture he described as "too little, too late."

Goldman Sachs made no immediate comment when asked how it was communicating with clients.

"One of the more important messages (Smith) gave was the need for the bank to refocus attention on clients and attend more closely to their needs ... but even now, Goldman, as well as some media, seem to be overlooking that," Geers added.

The lack of quick, direct communication with APG underlined how much work Goldman needs to do to prove it puts its customers first, the Dutch group said.

"What about trying to re-win trust?" he said. "Goldman's clients are now being forced to explain to their clients why they are doing business with Goldman. We are now obliged to answer questions because of their company culture. From the bank's point of view, that is very bad."

Goldman has bounced back from several dents to its image in recent years, but industry insiders say the unprecedented attack from a former employee could start to push much larger volumes of prospective business to rivals.

"I have seen the internal memo from Goldman to its employees which says 'we all know this isn't true,' but perception is reality and a service provider lives or dies by whether they have happy clients," Geers said.

One London-based former hedge fund client of the bank, who declined to be named, said some asset managers and family offices were thinking twice about doing business with the bank before Greg Smith's remarks.

"We took them off our system some months back ... I used to know a few guys there, there was a few good ones in that bunch and I have noticed that just about all of them have left in the last year," the manager said.

"They used to tell me that they loved the firm; that it looked after its people and that it had a really good 'code.' And now those people are leaving, so it reflects what (Smith) is saying."